Calculating the ROI of Upskilling

Hiring vs. Upskilling

For any particular role, the ROI of upskilling is often driven by the difference in costs between hiring someone externally against the costs of training someone internally.

  • Cost-of-vacancy: Cost-of-vacancy refers to the difference between payroll & benefits savings and the revenue lost to a vacant role.
  • Onboarding costs: Onboarding costs include the monetary equivalent for manager time and employee time spent onboarding.
  • Learning time off: You can estimate the cost to the employer of offering on-the-job training by multiplying the employee’s hourly salary by the total number of hours they’ve spent learning instead of working.
  • Replacement costs: In certain cases, employers must find a replacement for the employee being upskilled. Strategic upskilling interventions ensure that the role replaced has lower recruitment fees & onboarding costs than the role being upskilled.


The ROI of an upskilling intervention is also heavily influenced by its impact on employee retention. The costs of employee turnover are significant. A 2019 Gallup poll found that every year U.S. companies lose a trillion dollars due to voluntary turnover. By offering upskilling opportunities, companies can reduce their employee turnover ratio to a healthier level.



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